On Thursday, the Portuguese government presented a new tax incentive for companies investing in the country this year. Minister of Finance Vítor Gaspar said that companies that make investments of up to €5m between June and December will be able to deduct around 20% of the amount invested from their annual corporate tax bill.

The banking sector ended mixed, with Banco Comercial Português up 1%, and Banco BPI gaining 1.5%, while Banco Espírito Santo shed 0.1%.

In energy stocks, EDP – Energias de Portugal advanced 2% leading the index’s gains after UBS rose the company’s price target. Meanwhile, Galp Energia added 0.7%, while EDP Renováveis fell 1.8%, leading losses.

Blue-chip Portugal Telecom rose 1.2%.

The exhibition features around 40 works by Joana Vasconcelos dotted around the former royal household and features “The Bride”, “Independent Heart” and “Marilyn”, as well as other such as “Lilicoptère”, “Perruque” and “War Games” never before shown in Portugal.

The Palace statement also drew attention to the level of profile generated by the exhibition online and points to the thousands of photographs on Instagram.

The exhibition remains on display through to late August.

The figures show the state clocked up a deficit of €2.548bn through to April, a rise of €1.148bn on March and up €600m on the same four months of 2012 according to the international accounting norms in effect.

April’s hike in the deficit is a further consequence of the fallout from the Constitutional Court decision to rule out some austerity measures and the Ministry of Finance repositioning its accounts so as to be able to pay out an additional ‘holiday’ month of pensions that the government had sought to suspend.

This worsening of the deficit comes despite a 17.9% increase in the taxation rate over the first four months of this year that ended up turning in a 5.8% rise in total revenue despite nine of the eleven individual taxes actually falling, with only personal and vehicle circulation taxes revenue rising.

In terms of personal income taxation (IRS), there was a 24.6% surge in the state’s year-on-year tax take representing an additional €778.2m to the state coffers, totalling €3.947bn.

However, this came against a 13.2% fall in corporate tax (IRC) revenue, dropping €84.3m to a total of €552.8 million in the first four months of this year.

Also demonstrating the prevailing fragility of the economy, VAT revenues also slid back 0.3% on the same period of 2012, a €12.3m loss in revenue, while car sales duties slumped a further 22.5%.

The budget deficit is due to close the second quarter in June below the level of €4.5bn in accordance with the revised deficit target for this year of 5.5% against the previous 5%.

The time for investment has come,” Vítor Gaspar said, adding that this measure would be “catalytic“ and its impact would be amplified by national and European efforts to ensure increased financing.

The government is going ahead with an extraordinary tax credit, which will see companies’ corporate tax payments reduced in the amount of 20% of investments up to €5m made between 1 June and 31 December.

Vítor Gaspar said the measure was sanctioned by Portugal’s creditors – the European Commission, European Central Bank and International Monetary Fund.

He also said the measures were aimed at creating employment. “The creation of jobs for young people is the priority of both the government and Europe,” Gaspar said.

This came after the minister of finance announced Thursday that German development bank KfW agreed to create credit lines for Portuguese companies, adding that it will purchase holdings in small and medium enterprises (SMEs).

Featured image by Lusa

Público
«Retirement of 6,000 teachers goes ahead to create new vacancies», reveals Público, as Secretary of State for Education João Casanova de Almeida announced on Thursday that retirement applications will be processed promptly, enabling the country to release some 6,000 teachers from the mobility programmes and create new vacancies for teachers who are currently without placement.

Correio da Manhã

«Gaspar collects €37.5m a day in income tax», reports Correio da Manhã, as taxation revenue from pensions and personal income has registered an increase, after Minister of Finance Vítor Gaspar introduced new brackets and the new surcharge last year.

Diário de Notícias
«Court clerks were on leave an average of 36 days in 2012», writes Diário de Notícias, as 30% of over 7,000 employees took sick leave in 2012, mainly for psychiatric reasons. According to the daily, these absences added up to 7,000 days and affected court cases.

Jornal de Notícias

«Porto: Arrábida bridge declared national monument», writes Jornal de Notícias, as the government approved six new national monuments on Thursday, including the Arrábida bridge between Porto and Vila Nova de Gaia, as well as the Castle of Penamacor and the Vale de Maria do Meio Cromlech, in Évora. The daily newspaper reports that this year the Arrábida bridge also celebrates its 50th anniversary and the centenary of the birth of Edgar Cardoso, the engineer who designed it.

i
«Socialist Party willing to form coalition with the right if it fails absolute majority», writes i, as the centre-left party is considering all options in the next general election. According to the paper, if the Socialists fail to achieve an absolute majority, then leader António José Seguro might be faced with the option of forming a coalition with the right to guarantee stability.

Diário Económico

«Companies investing this year to see corporate tax reduced», reports financial daily Diário Económico, as the ministers of the economy and finance announced a package of fiscal measures Thursday to trigger investment in Portugal, including a new tax credit – meaning companies which invest in the country between 1 June and 31 December of this year will have access to a tax credit which will enable them to deduct 20% of the amount invested, to a limit of 70% of the company’s annual tax bill.

Jornal de Negócios

«Beppe Grillo? We already have a clown. He’s called Cavaco Silva», writes financial newspaper Jornal de Negócios, quoting journalist and author Miguel Sousa Tavares, who tells the paper in an exclusive interview why he considers President Cavaco Silva a “clown” and that he has never been a “revolutionary” or a “communist” but just a “boring social democrat.”

A Bola

«€70m deal», reports Record, as Monaco has signed Colombian striker James Rodríguez and Portugal’s João Moutinho from FC Porto for 5 years.

Record

«Domingos attacks Jardim», reveals Record, as the former and current Sporting coaches tangled in a contentious duel. The sports daily reports that Domingos Paciência was offended when Leonardo Jardim criticised his successors, stating it was “sad when a coach says publicly that no one can do the job better than him.”

O Jogo

«I don’t know what I did wrong to these people», writes O Jogo, quoting Real Madrid defender Fábio Coentrão, who says he does not feel wanted by his club and that he would sign a life contract with Benfica.

In a statement sent to the Portuguese stock exchange regulator (CMVM) Wednesday the company compared this year’s earnings with the €55.4m made last year.

Nonetheless, the announcement had almost no effect on share prices as analysts were expecting profits around €23m.

The company said revenue was down 9.6% to €1.553bn mainly due to the devaluation of the Brazilian real against the euro and the domestic economic recession.

PT said turnover in Portugal was 6.8% down on the same period in 2012 but slightly up on the previous quarter.

Portuguese Minister of Finance Vítor Gaspar (L) and his German counterpart Wolfgang Schaeuble in a press conference Wednesday (Photograph: Rainer Jensena/EPA)

The German investment bank KfW is to create credit lines for Portuguese companies and will purchase holdings in small and medium enterprises (SMEs), Portuguese Minister of Finance Vítor Gaspar announced Thursday, in Berlin. 

The announcement was made following a meeting with his German counterpart, Wolfgang Schaeuble, in Berlin, where they discussed high financing costs and the fragmentation of financial markets, according to financial newspaper Diário Económico. 

We can benefit from German support, especially from the German development bank KfW which will be available to extend credit lines or to participate in the capital of SMEs mediated indirectly by Portuguese institutions,” Vítor Gaspar said.

A statement released by Germany’s Federal Ministry of Finance said the bank will “provide further technical support to the setting up of a new Portuguese financial development institution” which it considers “a vital instrument for investing in sustainable growth and job creation.”

Portugal and Germany are working on a memorandum of understanding which is expected to be concluded by the second half of this year, an official source told Diário Económico. 

The new financial development institution will grant credit not only through mediated credit lines aimed specifically at SMEs, but also through sharing of risks on mortgage portfolios of credit and guarantee institutions, and through the allocation of direct financing.

Sábado
«If I was told I’d die tomorrow, I’d think it was fair. I’ve had very good life», is the cover story in Sábado, quoting from an in-depth interview with journalist and writer Miguel Sousa Tavares, as he launches a new novel, following the success of “Equador” and “Rio das Flores”.

Público
«Passos wants a fiscally competitive Portugal, but in 6 or 7 years’ time», reveals Público, as British charity Oxfam claims there is €9.5tn in tax havens in the European Union. The daily also reports that Socialist leader António José Seguro has called for an end to offshores and the taxation of financial transactions and that Germany wants to help Portugal’s small and medium enterprises (SMEs).

Correio da Manhã

«Public debt increases by €1.8m an hour», reports Correio da Manhã, as Portugal’s public debt at the end of the first quarter was over 127% of gross domestic product (GDP). According to the daily, the latest figures reveal that in the first three months of the year, public debt increased €3.8bn, to a total of over €20bn.

Diário de Notícias
«Portuguese chef tried in Switzerland for second “gay” homicide», writes Diário de Notícias, as a Portuguese 40-year-old chef who worked in Swiss restaurants and hotels is suspected of murdering a taxi driver in 1999, stabbing him 47 times with a knife. According to the daily, the chef is already serving a 25 year sentence in Luxembourg for killing another man he was involved with.

Jornal de Notícias

«A few minutes more and everyone would have died», writes Jornal de Notícias, as two fishermen drowned in Furadouro, Ovar, yesterday, 150m from the beach. João saved 5 people, the newspaper reports, including his brother. The daily also reports that 23 people have died in the sea since 2010.

i
«Sampaio led revolt in Council of State», writes i, as former President Jorge Sampaio led the “revolt” that set a faction within the Council of State against President Cavaco Silva due to the final statement. According to the paper, Sampaio slammed the text that Cavaco Silva wanted to release to the press when he saw it did not correspond to what had been approved during the meeting.

Diário Económico

«German development bank will help finance Portuguese SMEs», reports financial daily Diário Económico, as announced by Minister of Finance Vítor Gaspar and his German counterpart Wolfgang Schaeuble.

Jornal de Negócios

«Businesses being set up at pace not seen in 5 years», writes financial newspaper Jornal de Negócios, as figures reveal that the number of new businesses set up in the first quarter of 2013 is higher than those created in the same period in the last five years. According to the paper, the great majority of these small businesses have been entirely financed at their owners’ expense.

A Bola

«It’s a pleasure to see Sulejmani play», reports Record, quoting former Real Madrid star Predrag Mijatovic on the Serbian player, recently hired by Benfica.

Record

«Dragon robs Carlos Eduardo», reports Record, as Benfica came too late and Porto has hired the Brazilian player for four seasons.

O Jogo

«Applause is not enough, we need victories», writes O Jogo, quoting Benfica chief Rui Costa, as the team only managed to come second, after defeats against Porto in the Portuguese League and Chelsea in the Europa League.

The operator said about 400,000 were business passengers.

Javier Gandara told Lusa the British low-cost company “expected to expand its presence in Lisbon and Portugal”, where it is now the second biggest operator.

Gandara said he expected the Portuguese market to grow by about 3% in 2013, but added that this growth could be at risk next year if airport taxes continued going up.

Easyjet currently has four planes based at Lisbon but has no plans to increase that number.

If the government does not hand in the document on the 31st, the debate will be moved on to 12 June, the leaders’ conference spokesman Duarte Pacheco said.

Pacheco told reporters that the junior minister of parliamentary affairs, Teresa Morais, stated there was a “very good possibility” the Amending Budget would be delivered by 31 May.

The Amending Budget will include alterations to the articles declared unconstitutional by the Constitutional Court.

The alteration to the rules about holiday bonus pay will imply changes to tables in all public bodies, a highly complex matter, the MP said.

The government’s Strategic Budget Document may be discussed the same day as the Amending Budget.